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Inverse Leveraged ETFs Weekly Round UP


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After seeing 'the worst two-week start to a year ever' and the bears completely invading the market after forcing the bulls out, a look at the inverse leveraged ETFs' performance seems intriguing (read: Long/Short ETFs to Brave This Wild Market ).

Last week, the leveraged/inverse ETF world was mostly influenced by oil worries and hard landing fears in China. Only a handful of ETFs with an inverse approach to the broad market indices gained while rest of the pack lost. Let's take a look at some top performing inverse leveraged ETFs to check the top players in the market now.

Top Performers Return Last Week
Daily Small Cap Bear 3X Shares ( TZA ) 10.4%
Daily Financial Bear 3X Shares( FAZ ) 8.74%
UltraPro Short ( SQQQ ) 8.04%
UltraPro Short S&P500 ( SPXU ) 5.82%
UltraShort Dow30 ( DXD ) 4.03%

Bear U.S. Small-Cap ETFs in Focus

U.S. small-cap ETFs - often viewed as the true picture of domestic health - have seen a choppy ride so far this year on reduced strength in the greenback, making large-cap stocks more appealing. Plus, small-cap stocks are highly volatile in nature. So, the recent upheaval in the market has weakened this hyper-sensitive investing area.  

As a result, TZA took the top spot in the inverse leveraged ETFs scoreboard last week.  The product gives thrice the opposite performance (daily) of the Russell 2000 index. The index is made up of the smallest 2000 companies in the Russell 3000 Index.

Bear Financial ETF in Focus  

Bear financial ETFs also had a nice spell last week thanks to sheer disappointment in the banking sector. While all hopes were pinned on the sector's recovery post liftoff, global growth worries kept the long-term U.S. Treasury bond yields at check in reality. In any case, capital market activity was weak, core loan portfolios were moderate, and now the sole hope of improving net interest margins is now dimming.

This had a bearing on the financial stocks and made FAZ - a bear ETF on the financial services sector of the large cap U.S. equity market following the triple leverage strategy - the second best performer last week.

Bear Nasdaq ETF in Focus

In general, the tech-laden Nasdaq is fundamentally in great shape. But its high growth nature and overvaluation concerns made the space a loser in the global market sell-off. Thus, SQQQ which has three times the inverse leverage on the NASDAQ-100 Index also generated solid returns last week (read: Internet ETFs to Buy After the Latest Sell-Off ).

Bear S&P 500 ETF in Focus

In tune with the falloff in the global market, the S&P 500 has also shed about 8% so far this year (as of January 15, 2016). Overvaluation concerns, slowing retail sales for the month December, still-tepid inflation and anxiety over the next move of the Fed after the December liftoff dampened investors' mood and dragged down this U.S. blend equity index. To reflect this widespread negative sentiment, SPXU - the bear ETF on the S&P 500 with three-times exposure - lost about 6% last week (read: 4 Ways to Short the S&P 500 with ETFs ).

Bear Dow ETF in Focus

Needless to say, with such a plunge in the broader market, the Dow Jones index will not be sitting steady. Thanks mainly to a freefall in oil prices , Dow Jones Industrial Average ETF ( DIA ) has lost over 8% so far this year (as of January 15, 2016).

Thus, DXD, having double the negative focus on the inverse of the daily performance of the Dow Jones Industrial Average Index, retreated substantially last week.

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DIRX-SC BEAR 3X (TZA): ETF Research Reports

DIR-FIN BEAR 3X (FAZ): ETF Research Reports

PRO-ULS QQQ (SQQQ): ETF Research Reports

PRO-ULT SH S&P5 (SPXU): ETF Research Reports

PRO-ULSH DOW30 (DXD): ETF Research Reports

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , ETFs
Referenced Symbols: TZA , FAZ , SQQQ , SPXU , DXD



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